Picture source @Visual China
Text |Shi Tianhao
Looking back in 2019, TSMC has gone through several twists and turns. On January 28, 2019, TSMC was contaminated by photoresist , resulting in a large number of wafers being scrapped, losing tens of thousands of 12-inch wafers. What was affected was the 16/12nm process of the Fab 14B factory, which is the main revenue. After this bad news, TSMC announced the impact of the incident after evaluation on February 15, 2019 and announced the reduction of the first-quarter financial forecast.
According to the TSMC at that time, the photoresist raw material incident will affect (2019) full-year earnings, and it is expected that the gross profit margin in the first quarter will be between 41% and 43%, lower than the previous forecast of 43% to 45%. At the same time, TSMC lowered its operating profit margin expectations to 29% to 31% respectively, compared with the previous 31% to 33%. In more than a month, TSMC actually lowered its financial prepayment three times.
TSMC President Wei Zhejia officially announced on April 18, 2019 that due to the impact of the "photoresist" incident, the first quarter of 2019 was the bottom of the whole year.
Due to the "photoresist" incident, the operation of TSMC was once in a "haze". Not long ago, the 2019 Q4 financial report released by TSMC swept away the previous gloom. According to the financial report, the revenue of TSMC in the quarter was US$10.394 billion, a year-on-year increase of 9.5% and a month-on-month increase of 8.3%; net profit was US$3.803 billion, a year-on-year increase of 16.1% and a month-on-month increase of 14.8%, which is higher than the year-on-year and month-on-month increase of revenue.
In the previous three quarters, TSMC 's revenue was US$7.096 billion, US$7.746 billion and US$9.396 billion respectively. Including US$10.394 billion in the fourth quarter, TSMC 's revenue in the whole year of 2019 reached US$34.632 billion. Much exceeded analysts' expectations.
In terms of chip process revenue, in the fourth quarter, TSMC's more advanced process technology revenue accounted for the highest proportion, accounting for 56% of the total wafer revenue. Among them, 7nm shipments account for 35% of the total wafer revenue, 16nm is 20%, while 10nm is only 1%. The reason why
TSMC can achieve such good results in Q4 is that Huawei and Apple are well-deserved heroes. Huang Wende, vice president and CFO of TSMC , said in the conference call that the growth of TSMC business in the fourth quarter is due to the initial deployment of 5G and the strong demand for high-performance computing-related applications by high-end smartphones, which has greatly increased the orders for TSMC 7nm process. Since last year, Huawei, Samsung , Qualcomm and Apple have all begun to gradually adopt flagship chips with 7nm process. Among them, almost all the mid-to-high-end products of the first three are starting to try the 7nm process, so the shipment volume is large.
Huawei has significantly increased its orders for TSMC this year (2020), and the price reduction of Apple iPhone 11 has also driven the growth of the A13 processor foundry business, which provides an excellent opportunity for TSMC .
In July 2019, TSMC's 7nm production capacity began to be fully loaded on the entire line. The surge of 7nm orders has caused its 7nm production capacity to continue to explode, and it will also be in short supply until the first half of 2020. On November 20, 2019, the share price of TSMC , which had risen for 10 consecutive weeks, hit a new high, with a market value of US$262.7 billion, surpassing Samsung Electronics' US$261.1 billion, becoming the most valuable high-tech company in Asia. Compared with the "defense" at the beginning of last year, TSMC ushered in a good start in 2020.
5G accelerates, TSMC overcomes the crisis
On June 5, 2018, Zhang Zhongmou officially stepped down as chairman of TSMC at the shareholders' meeting. This is Zhang Zhongmou's second retirement. Since then, TSMC has entered the "post-Zhang Zhongmou" era. It is estimated that Zhang Zhongmou did not expect that as soon as he retired, TSMC entered an extraordinary period. The "photoresist" incident in January 2019 cast a thick shadow on TSMC in the post-Zhang Zhongmou era. The impact of the
"photoresist" incident was also directly reflected in the first quarter of 2019 financial report.
TSMC was published on April 10, 2019 and the first quarter of 2019 revenue.According to data, the consolidated revenue in March 2019 was approximately NT$79.722 billion, an increase of 30.9% from February and a decrease of 23.1% from the same period in 2018. In total, revenue in the first quarter of 2019 was approximately RMB 218.74 billion, a decrease of 11.8% from the same period in 2018.
Because TSMC previously had conservative views on the semiconductor 's prosperity in 2019, it is estimated that the semiconductor industry without memory will grow by 1% in 2019. As for wafer foundry, it only maintained a flat state, making TSMC estimated that its revenue growth in 2019 will only grow slightly by 1% to 3%. According to the legal person's expectations at that time, as the timing gradually emerged from the first off-season, the low point in 2019 will fall in the first quarter of 2019. With the mass production of the 7-nanometer version, the utilization rate of 7-nanometer production capacity is expected to increase, and the revenue of TSMC is expected to warm up quarter by quarter.
In the next three quarters, TSMC 's revenue was US$7.746 billion, US$9.396 billion and US$10.394 billion respectively. Including US$7.096 billion in the previous quarter, TSMC 's revenue in the whole year of 2019 reached US$34.632 billion.
In the four quarters of 2018, TSMC 's revenue was US$8.459 billion, US$7.853 billion, US$8.486 billion and US$9.398 billion, respectively, with revenue for the whole year of US$34.196 billion, and US$34.632 billion in 2019 an increase of US$436 million compared with US$436 million, a year-on-year increase of 1.27%.
Compared with the four quarters of 2018, TSMC 's revenue in the first two quarters of 2019 declined significantly, and its annual revenue eventually exceeded that in 2018, thanks to the significant increase in the third and fourth quarters.
is a large number of orders from Apple , Qualcomm and Huawei, which has led to the continuous growth of 7nm chip shipments of TSMC , and has now reached as much as 35%, accounting for almost one-third of all shipments. AMD even made reservations in advance and directly won 20% of the TSMC's 7nm production capacity to ensure the production of its own processors and graphics cards. From this point of view, it is natural that TSMC's profit in 2019 exceeded expectations.
Although people often say that the smartphone market is approaching saturation, according to IDC's estimates, due to the increasing demand for 5G, the mobile phone market shipments in 2020 are still very optimistic, and are expected to exceed 1.4 billion units.
Since 5G mobile phones have started to use TSMC 7nm chips, as TSMC said in its financial report, "2020 will be a year of high growth." Now, taking advantage of the east wind of 5G and 7nm, TSMC 2020 will be a good year.
30 went from nothing to the world's first
Before TSMC was founded, the world's semiconductor factories adopted a single IDM model, that is, chip design, production, and packaging are all independently completed by manufacturers, such as Intel and Samsung.
Two years after returning to Taiwan from the United States, Zhang Zhongmou, who founded TSMC , worked hard at Texas Instruments in his early years and once became the third largest figure in the company. He had been dealing with top semiconductor companies and senior tycoons at that time for many years, and had an international perspective that most Chinese people did not have at that time.
He believes that operating this traditional IDM model in Taiwan will eventually not be as good as the world's largest manufacturers. Considering that there was no company specializing in OEM services in the market at that time, Zhang Zhongmou saw the opportunity and immediately positioned TSMC as a pure wafer foundry company.
, the world's first professional integrated circuit manufacturing service (Faste Foundry) company, Taiwan Integrated Circuit Manufacturing Company ( TSMC ), was born in 1987. After the birth of TSMC , it directly led to the transformation of the entire industry towards verticalization and segmentation. Since then, many wafer foundry companies have been independent from the "main body", and in addition, packaging and testing companies have been independent, such as Sun and Moonlight. Semiconductors have officially evolved from integration into three sub-industry, namely chip design, wafer foundry, and packaging testing.
TSMC was not optimistic when it was first established. On the one hand, the global semiconductor market was sluggish. On the other hand, because TSMC just started and has no reputation internationally. In addition, many large companies had not yet accepted the OEM model at that time, so TSMC barely survived in the first year of TSMC only relied on some small orders.
In the second year of its founding, TSMC welcomed Andrew Grove, co-founder of Intel , and the two parties began to intentionally promote cooperation. However, during the Intel certification, Intel found that TSMC products had 266 defects, and the cooperation between the two parties was once deadlocked. The engineers of TSMC optimized the process day and night, and finally passed the Intel certification, making them low-end chip foundry, making their reputation.
and TSMC's first important order comes from today's chip giant Qualcomm. Qualcomm founder Irving Jacobs is Zhang Zhongmou's junior brother at MIT. At that time, Irving obtained the exclusive patent for wireless chips, but he did not have the funds or ability to make chips by himself. So the MIT brothers hit it off, Qualcomm designed it, and TSMC was used to manufacture it.
It was not until 1998 that TSMC barely caught up with the IDM factory in the 0.18 micron process. Under cost considerations, these IDM manufacturers began to treat TSMC differently. In order to seize large orders for IDM customers, TSMC has formulated a "Qunshan Plan": to set up exclusive technical plans to support individual different needs for five IDM manufacturers that use advanced processes.
An opportunity came in 2000. At that time, 12-inch wafer fabs became the mainstream of factory construction, but the cost of such a factory is as high as 2.5 billion to 3 billion US dollars. Not only can small and medium-sized IDM operators not afford it, but large IDM operators often find it difficult. The advantages of TSMC's 's Qunshan plan began to emerge, and gradually gained the favor of giants such as Deyi, STMicroelectronics, Motorola, and TSMC's won the hearts of IDM.
Through the continuous efforts of TSMC , according to the latest global wafer foundry market share report, TSMC continues to become the leader of wafer foundry with a market share of 52.7%, Samsung ranks second with a market share of 17.8%, and Grofonte ranked third. In addition, SMIC in mainland China ranks fifth with a market share of 4.3%.
5G, AI applications and 5nm and 3nm
On January 16, 2020, in the financial analyst conference call, Wei Zhejia, CEO and vice chairman of TSMC, said that in 2020, the industry-leading 7nm process and strong demand for 5nm will strongly support their business development, and the four major platforms of mobile, high-performance computers, Internet of Things and automotive have strong growth trends.
is different from the 7nm process that has been mass-produced for nearly two years. TSMC has not yet begun mass-produced chips with 5nm process, but TSMC has been developing for many years in 5nm and has started trial production in 2019. Wei Zhejia revealed at this meeting that 5nm mass production is progressing smoothly and the yield is already very good. It will be mass-produced in the first half of 2020.
TSMC CEO and vice chairman Wei Zhejia also talked about the mass production of the 5nm process. Wei Zhejia said that in 2020, the industry-leading 7nm process and strong demand for 5nm will strongly support the business development of TSMC , and the four major platforms of mobile, high-performance computers, Internet of Things and automotive have strong growth trends. The mass production of 5nm is progressing smoothly, and the yield rate is already very good. It will be mass-produced in the first half of the year.
In other words, in 2020, TSMC not only has the trump card of 7nm, but also the mass production of 5nm will be settled as expected, it will bring more benefits to TSMC .
According to Wei Zhejia, compared with the 7nm process, 5nm is a complete process node span, which can theoretically increase the density of transistors by 80% and increase the speed by 20%. They expect that under the driving force of mobile devices and high-performance computers, the production capacity of 5nm will grow rapidly and steadily in the second half of 2020, and is expected to contribute 610% of the revenue of TSMC.
Currently, Apple and Huawei are important customers of TSMC . The new Apple chip, flagship Kirin chip, etc. will all adopt the more advanced TSMC 5nm process. Previous news showed that the Apple A14 chip will use the latest 5nm process of TSMC , and the orders of Apple will account for two-thirds of the production capacity of TSMC .
According to the plan of TSMC , they will mass-produce 5nm EUV processes in the first half of this year, and their production capacity will increase to 70,000 to 80,000 wafers per month in the second half of this year. This year's production capacity will mainly supply Apple and Huawei. TSMC's 's 3nm process will also start construction this year (2020), and initial production is expected to be achieved in 2022.
However, the biggest problem with 3nm and 2nm or even 1nm processes in the future is not technical research and development. Even if technical difficulties are overcome, the biggest problem with these new processes is that the cost is too high and no one can afford it. In order to solve the process problems, companies including TSMC will invest huge amounts of money in research and development. At present, building a 3nm or 2nm-level wafer factory starts from tens of billions of dollars.
According to SemiEngineering, IBS's calculations show that (including chip design companies and foundries) 7nm chip research and development cost US$300 million, 542 million in 5nm process, and 3nm and 2nm processes have no data, but starting at US$1 billion will be a key hurdle.
eliminates the high R&D costs, and when the 3nm and 2nm nodes are at the 3nm and 2nm nodes, there are few companies that have demand for such high-end processes and can control costs. Nowadays, only large companies like Huawei and Apple can afford it. If you develop further, there will be 2nm and 1nm. TSMC once said that if you are optimistic, the 2nm process will be mass-produced in 2024. For the 2nm process or even 1nm process, R&D is not the biggest problem. Who will you sell it to? Who is willing to buy it? That's the biggest problem.
crisis is still there, and strong enemies around
In May 2019, the US side included Huawei on the entity list. Affected by the ban, not only U.S. suppliers cannot supply Huawei, but even more than 25% of the technology or materials of other non-U.S. manufacturers originated from the United States and cannot be supplied to Huawei.
means that according to international regulations, if a certain production line of TSMC originates from the United States accounts for more than 25%, it must comply with the US ban. According to Sun Youwen, senior director of TSMC enterprise information, TSMC currently contains all materials and EDA tools. The technical content obtained by TSMC from the United States does not exceed 25%, and said that it is a bit far from 24.999%, so don’t worry about this regulation.
At the end of last year, TSMC suddenly announced that it would terminate its cooperation with Huawei in the 14nm process process and stopped supplying the process chip products. There are many different reasons, and the reasons may be related to the ban from the United States.
As Huawei's main partner, TSMC produces a large number of chips for Huawei every year. For example, last year's HiSilicon Kirin 990 series was found by TSMC . As the largest wafer foundry in the world with the most mature technology, there is no doubt that the strength of TSMC will be forced to be cut off. Once the 14nm chip is forced to be cut off, the impact on Huawei will be very serious.
and TSMC spokesperson Elizabeth Sun also said at the TSMC 2019 technology seminar held by the Hsinchu Technology Center in Taiwan that the US shipment of Huawei is not affected by the US ban on restricting Huawei equipment.
For the United States, suppressing Huawei will definitely not give up. This is a "national policy" of the country. It is very unlikely that it will give up suppressing Huawei in the short term in the future. Recently, the leak of a message made people feel that the United States is planning to take action again. The United States intends to adjust the previous 25% of the U.S. technology limit to 10%, and among which, the 14nm chip of TSMC will be affected.
means that if the United States implements a new strategy, Huawei's 14nm chip will also be cut off, which is a loss for Huawei and is also a damage to TSMC . You should know that Huawei accounts for about 8-11% of TSMC's business. Losing these businesses will cause TSMC revenue to decline. Moreover, TSMC is not the only foundry in the world.
The good news is that domestic SMIC suddenly stated that its 14nm foundry has been put into use and the chip yield rate has reached 95%.SMIC's achievement is already fully able to meet Huawei's needs in 14nm chips, so Huawei placed 14nm orders in SMIC, which were originally orders from TSMC's Nanjing branch.
Understanding the turmoil in the United States, Huawei is expected to consciously divide some of its businesses to other crystal foundries.
and SMIC has received a large number of orders from Huawei, which will surely have considerable benefits for its future rise and development. Once these 14nm chips perform well in the end, SMIC's development space will be improved again in the future.
not only SMIC snatched the "duck to the mouth" of TSMC , but Samsung also threatened TSMC in 5nm, 3nm and 2nm. Although TSMC has achieved absolute advantages in the 7nm node, it has also made smooth progress in 5nm and obtained orders such as Apple A14.
Samsung has not relaxed its catching up and plans to invest US$116 billion (about 800 billion) in its semiconductor business by 2030 to enhance its strength in the non-memory chip market. Zhang Zhongmou, founder of TSMC , once told the media that the war between TSMC and Samsung is not over yet, TSMC has only won one or two battles, but the entire war has not been won yet. Currently, TSMC is temporarily dominant.
. In order to achieve process iteration and capacity increase faster, Samsung has developed the patented version of GAA, namely MBCFET (multi-bridge FET). According to Samsung, GAA is based on a nanowire architecture and requires more stacks due to narrower channels. Samsung's MBCFET adopts a nanosheet architecture. Since the channel is wider than the nanowire, it can achieve greater current per stack, making component integration easier. With controllable nanosheet width, MBCFETs provide a more flexible design. Moreover, MBCFET is compatible with FinFet, and uses the same production technology and equipment as FinFet, which is conducive to reducing the difficulty of process migration and forming production capacity faster.
According to Korean Economics, Samsung has successfully developed the first GAAFET-based 3nm process, and mass production is expected to start in 2022. Compared with the 7nm process, the 3nm process can reduce the core area by 45%, reduce power consumption by 50%, and improve performance by 35%.
According to Samsung's R&D roadmap, after 6nm LPP, there are two nodes, 5nm LPE and 4nm LPE, and then enter the 3nm node, which are divided into two generations, GAE (GAA Early) and GAP (GAA Plus).
In May 2019, Samsung's 3nm GAE design kit version 0.1 was ready. Samsung expects the technology to be used in next-generation mobile phones, networks, autonomous driving, artificial intelligence and the Internet of Things and other devices.
and TSMC has not announced at present whether its 3nm process technology will adhere to FinFET or use GAA transistors like Samsung. TSMC only indicates that it has found a 3nm technology route and the R&D is currently progressing smoothly.
According to the previous plan, TSMC will officially start the construction of a 3nm wafer factory in 2020. Previous land application, environmental impact assessment and other work have been completed, and the entire construction plan investment is as high as US$19.5 billion.
According to TSMC CEO CC Wei once said that TSMC development in 3nm node technology is progressing smoothly and has been in contact with early customers. TSMC invested NT$600 billion (approximately 138 billion yuan) in 3nm Baoshan Factory, also approved a land use application in 2019. It is expected that construction will start in 2020 and mass production will be carried out in 2022. If nothing unexpected happens, 3nm chips will arrive in 2022, posing new challenges to the semiconductor industry chain. Although Samsung is eyeing her on
and SMIC is competing for each other, TSMC is full of confidence in the growth of the whole year of 2020. President Wei Zhejia expects that the global wafer foundry output value will grow by 17% this year. TSMC will benefit from 5G and AI-powered, and the demand for advanced processes such as 7nm and 5nm is strong, and I am confident that this year's operation will be better than the industry average.
Wei Zhejia said that TSMC four major technology platforms: smartphones, high-efficiency computing, automotive electronics and the Internet of Things will grow strongly this year, among which smartphones and high-efficiency computing-related chips have the strongest momentum, with an increase of more than 20%; the growth rate of automotive electronics and Internet of Things chips has also reached 15%.
He also believes that the momentum of global 5G infrastructure construction is becoming increasingly strong, and it is estimated that the penetration rate of 5G mobile phones will reach 15% this year, but the pull-up speed will be faster than 4G.
According to IDC, due to the increasing demand for 5G, the mobile phone market shipments in 2020 are still very optimistic, and are expected to exceed 1.4 billion units. These phones will use TSMC 7nm chips in large quantities; TSMC on 5nm chips also have a certain first-mover advantage. Currently, 5G, 7nm and 5nm are in full swing. At least for the foreseeable time, TSMC will still be very comfortable as usual.
